I strongly agree with this. Having debt after graduating from university can very significantly reduce a student’s options in terms of what to do next.
First jobs after graduation usually pay quite badly. It is tough enough for the student to just find a job that is appropriate for their intended career and pays well enough to live. If they also have to pay off loans their options can be very limited. You do not really want your child to have to live at home with you because it is the only way they can make ends meet. This would very significantly reduce their job options. Also, part of our job as parents is to help our kids get out on their own.
One example of this: My oldest graduated from university about 3 1/2 years ago with no debt. She took what was for her a dream job, but it did not pay very well. It was only possible for her to take it because she had no debt. The dream job allowed her to establish residence in a state that has a good public DVM program (we live in New England that only has one DVM program and it is both private and very expensive). This dream job she loved, and it led to a different job with a veterinarian in the same state. As a result she got into a very good DVM program and is paying in-state tuition (saving about $100,000 over four years while studying at a very highly ranked and very good program). None of this would have happened if she had graduated with debt.
We did however set a budget and made them stick to it. We told our kids what we would pay and we would not let them spend more – taking on debt was specifically not permitted.
I also agree that just because the universities think that you can afford $x per year per child does not mean that you really can afford this much. The budget that we set for our kids was what we felt that we could afford, and was indeed less than what the NPC’s showed as our expected contribution. Fortunately we were able to find schools that fit the budget based on some combination of merit aid, looking in Canada, and finding schools that cost a bit less than some. One daughter wanted a small school and did have the stats for somewhere like Bowdoin but the NPC was way out of line with reality. We also think that where she went instead was probably a better fit.
BU and Northeastern were for us the most expensive universities that either daughter was accepted to, and were way over budget. McGill was a fraction of the price for us. Whether this will be true for you I do not know (we have the advantage of dual citizenship in this particular case).
Sometimes if you want to get a reasonable deal you need to be willing to go where the reasonable deal is. Of course this applies to a lot more than just university education, but it applies very strongly to a person’s choice of university. Psychology is an areas where many, many very good universities have very good programs.
We expected our kids to understand that university is a once in a lifetime opportunity, and they are expected to make the best of it. So far both have done so (through their bachelor’s degrees – graduate school has just started for one and is “not yet” for the other). Their “skin in the game” was to find and select universities that fit the budget, and do very well at university.
I agree with this also. If the debts taken up by students attending BU or Northeastern are paid off by the government this is not going to go over well with my plumber or with the guy who pumps out my septic system every two years (who I have gotten to know over the years).